Harvard study sees increasing gains in U.S. home-improvement spending

CAMBRIDGE -- Annual increases in home-improvement spending are expected to accelerate as the year progresses, according to a prominent housing study group at Harvard University.

The Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University reported Thursday that national expenditures for home-improvement projects are expected to total $140.9 billion for the first quarter of this year, up 4.3 percent from the same period a year ago.

However, spending is expected to increase to $154.8 billion for the third quarter (July 1 to Sept. 30) of this year, which would be a 7.6 percent increase from the comparable year-ago period.

By then, the level of annual spending in nominal terms is anticipated to surpass the previous peak set in 2006, according to the Leading Indicator of Remodeling Activity.

In a statement, Joint Center Managing Director Chris Hebert credited steady increases in owner-occupied housing as being a key factor in the expected spending gains.

"In most markets across the country, rising house prices are bringing more homes to the market and increasing sales, which is a large driver of home-improvement activity," Hebert said.

Abbe Will, a research analyst at the Joint Center, added that "more discretionary projects" have been added to home-improvement priorities.

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"The real test this year will be whether the industry can clear ongoing bottlenecks in labor availability and consumer financing concerns to fully meet this increased demand," she said in a statement.

The Leading Indicator of Remodeling Activity is designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters. It is intended to help identify future turning points in the business cycle of the home-improvement industry.

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